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CBA shareholders file class action over alleged money laundering rule violations

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CBA shareholders file class action over alleged money laundering rule violations

Commonwealth Bank of Australia shareholders have filed a class-action lawsuit against the lender following a drop in the share price on allegations that it breached money laundering and terrorism financing rules.

The class action involves CBA shareholders who acquired shares in the company between July 1, 2015, and Aug. 3, and were impacted by a share price drop after the Australian Transaction Reports and Analysis Centre, or AUSTRAC, initiated legal proceedings against the bank in August for alleged violation of money laundering laws, particularly regarding its use of intelligent deposit machines.

AUSTRAC has accused the bank of more than 53,700 violations of money laundering and counterterrorism financing laws.

The filing names outgoing CEO Ian Narev, current Chair Catherine Livingstone and other senior management including Chief Risk Officers Alden Toevs and David Cohen and nonexecutive directors Launa Inman and David Higgins as among those who knew of the AUSTRAC issues, which remained undisclosed until 2017.

The lawsuit will be headed by lead plaintiff William Phillips, and will be filed on an open class basis, which means all affected shareholders will have their rights protected, and those that do not wish to participate can opt out. The class action was filed in the Federal Court of Australia by Maurice Blackburn Lawyers.

Maurice Blackburn said in a statement that "thousands" have registered their interest in the class action, including "hundreds" of institutional investors.

CBA plans to "vigorously defend this claim," according to a company statement.